A business case that ignores social issues is no case at all. The business case has not traditionally included the ethical rationale or the moral justification. Fortunately, making the business case for ethics is getting easier.
The Business Case: The long road to proving ethics pays
When we talk of the ‘Business Case’ we usually mean the numbers, being the financials and commercial operating model of a business, idea or strategy. The business case has not included the ethical rationale or the moral justification. Societal context can usually only be gleaned through market or competitor analysis and economic trends, based on data and ‘hard’ facts.
Belief, as in the moral compass, values or personal principles, are side-lined within such business cases or cleverly cloaked through ‘alignment’ with espoused company values (sometimes a long way from actual practices).
The lament of those working in people-focused roles, sustainability and responsible investment has been the demand, and thus necessity, to present ‘the business case’ for ethics. They are asked to present the commercial and financial justification for what might otherwise be the right thing to do.
They’ve risen to the challenge however, working to quantify and measure trust, reputation and engagement, linking them to recruitment, staff retention and of course market share and company performance. At times the links have been tenuous however, easily challenged and often weakened by attribution to multiple factors. Persistently ethics has been considered personal, ‘soft’ or signalling the beginning of a (dreaded) slippery slope.
But alas, making ‘the business case’ for ethics is getting easier. Recent analysis and reports have announced that ethical investments can perform, not just to market averages, but above. Focusing on the customer is good for business (who would have thought?) and people want to work for organisations with a good purpose of which they feel connected.
In 2017, to have a business case that does not consider ethics and societal context is out-of-step and should be called out for what it is: merely the presentation of financial or commercial analysis, being just one aspect of a business proposition. A true business case will consider stakeholders (all of them, including the environment) and weigh up their interests and needs. It is from this informed and considered position, that the true business case can then be put forward.
Business exists within the context of society and corporations are made up of people. Factors relating to people and society are integral to the way we can do business and engage in markets. A business case that presents otherwise can’t claim to be a business case at all. Factoring in ethics is as it has always been - quite simply the right thing to do.
This article was originally posted in Investment Magazine